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Briefing Book: The FACE of Greece

The latest FACE report, scheduled to be unveiled this evening at the Katonah-Lewisboro school board meeting, will paint an even grimmer picture than usual for the district. Our district’s trend of fewer kids and more spending will become worse over the next five years.

By 2017, the FACE report projects, student enrollment in the district will have dropped to just under 3,000 students. KLSD’s enrollment hasn’t been that low since 1993, when the KLSD budget was a meager $33.3 million. The FACE report projects that, in 2017, the school district will be spending more than $126 million to educate the same number of children. Consider also that, in 1993, the district spent about $11,000 on average to educate a child. By 2017, according to the FACE report, the average cost of a Katonah-Lewisboro education will be about $42,000, an increase of nearly 400%.

If you want to know who got us there, look no further than our school board, which over the last 20 years has exhibited a comic inability to understand economics. In 2004, in one of its many arrogant attempts to “educate” the community, the school board released a 30-page document called “KLSD-Understanding the Last Ten Years.”

Here are the five crucial words missing from that document: “lifetime,” “health care,” pension,” and “benefits.” Clearly, in 2004, our school board didn’t understand the last 10 years and wouldn’t understand the next 10.

Unlike Sandy Grebinar, the dyspeptic leader of our teachers’ union, schools Superintendent Dr. Paul Kreutzer understands the future. Dr. Kreutzer talked about the benefits crisis in our district on Oct. 11, when the district’s auditors issued their report. (The video is on the district’s website.) And that, dear reader, brings us to OPEB.

No, OPEB is not the name of a hobbit in the next Lord of the Rings movie. OPEB stands for “Other Post-Employment Benefits.” OPEB is the amount that the district owes for retiree health care — our “accrued liability,” in actuarial speak. How much is OPEB, you ask? It’s a staggering $180 million, one and a half times the size of our school budget. “We are the Greece of school districts,” one reliable source told Briefing Book upon scrutinizing OPEB. And unlike a hobbit, OPEB and the Greek debt get bigger every year.

“This is a significant warning that we’re heading in the wrong direction on our future liabilities,” Dr. Kreutzer said that October evening. “We do not have a mechanism under state law to save for this. If this continues unabated, this will be one of the most significant issues that this district faces.”

Dr. Kreutzer warned that because the law won’t let us prefund our OPEB liability, OPEB “is a credit card that’s running at 20% interest. Every year, the balance we owe goes up because our minimum payment isn’t even covering the interest. We are losing ground and it will get to the point where we won’t be able to pay for programs for the kids because we have to be making these payments every year.”

What creates OPEB are the retiree medical benefits promised under our union contracts like the ones now being negotiated. Here at Briefing Book, we use the term “negotiated” loosely. “The union’s strategy is to slow-walk the negotiations into next year because their benefits and raises will continue,” another reliable source told us. “If nothing changes, the average teacher gets a 5% raise.”

Luckily, it wasn’t all gloom and doom at the October meeting. Resident liberal Janet Harckham provided some much-needed levity when she tried to downplay OPEB, noting that “every school district has this issue.” (Bet it feels good to have company, doesn’t it?) Ms. Harckham then volunteered that “it’s particularly not good that we have to report it [OPEB].”

That’s kind of like saying that the problem with the credit card bill is that you keep getting that statement every month. Then again, that’s how we got here — liberals never met a government-issued credit card they couldn’t max out.

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  • reeve1

    The school’s finances may well be reminiscent of Greece, but this column practices a brand of journalism that went out with the fall of the Soviet Union.

    Last year Mr. Piro attacked a women town board candidate for supporting our previous supervisor’s half of one percent tax increase in a budget which actually lowered the tax levy and was praised by Standard & Poor’s, the State Comptroller’s office and the Town’s auditors.

    Now he singles out Janet Harckham for attack as the school board’s “resident liberal” despite her acknowledgment of the district’s longstanding problems (which Mr. Piro admits occurred over a 20 years) and despite the political courage Ms. Harckham showed in supporting the selection of Dr. Kreutzer (who Piro praises) despite the huge controversy caused because of Dr. Kreutzer’s role in the emergence of Gov. Scott Walker in Wisconsin.

    Yet Mr. Piro, still continues to give his candidate, our current supervisor, a free pass on delivering a $6.4% tax increase, even without the road money, that would make our neighboring towns blush.

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